Why the Meltdown Should Have Surprised No One - Peter Schiff - Mises Institute

Peter Schiff on the financial meltdown at Mises Institute

Sentences to ponder:

Back then, we borrowed money to make investments, to build infrastructure, to build factories, to build farms, to build a productive economy. We invested the money; we didn't just spend it on stuff.
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And we became the world's wealthiest economy because we borrowed to produce. What we've done recently is we've borrowed to consume. We didn't produce anything. ... So how can we possibly pay the money back? We didn't acquire any income-producing assets to pay the money back.

And when the world finally lets the dollar collapse — and they will — our purchasing power isn't going to vanish, it's just going to be redistributed. Other currencies are going to rise. And people in other countries, people that are working in factories right now in China, that are producing products and just shipping them abroad and just kind of waving good-bye, all of a sudden, they'll be able to afford them.

The Chinese will be able to turn in their bicycles and buy automobiles because steel will be cheaper, because cars will be cheaper, because the value of their wages will rise because their currency will gain purchasing power.
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It's the Americans who are going to be buying the bicycles. Because, all of a sudden, cars will be too expensive for us, gasoline will be too expensive for us, because we'll be bidding with currency of much less value. And that's what's going to happen. And the world is not going to suffer because we don't buy their stuff. They're going to benefit because now there's going to be more stuff for them.

Right now, because the world lends us so much money, there's a capital shortage. Wouldn't the world be better off investing their savings productively in their own countries, rather than just giving their savings to us? Wouldn't they be better off enjoying the fruits of their own labor, rather than laboring while we enjoy the fruits? It's obvious. And it's going to happen.